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Music, PlayStation Sales Propel Sony to Record Q1 Profits

The Japanese electronics and entertainment giant saw profits increase to $20.5 billion, a gain of 15%, during first-quarter 2021

Despite a slow recovery in some divisions due to pandemic concerns, Sony Group saw a record increase in profits of 9% in the period between April and June of 2021, the company reported Wednesday. During the period, which represents the first quarter of Sony’s financial year, Sony Group sales hit 2.25 trillion yen or $20.5 billion, a gain of 15%.

Led by robust PlayStation sales, Sony’s Game & Network Services division posted the highest revenue for the company in Q1, bringing in approximately $5.6 billion.

During an earnings call, Sony Executive Deputy President and Chief Financial Officer Hiroki Totoki also credited Sony’s music division, which increased revenue 44% driven by growth in streaming, including paid subscription streaming services and ad-supported music streaming.

However, the executive added that as pandemic restrictions have loosened a decline in “stay at home demand” for gaming and some electronic software affected profits in those areas. Totoki said observers should look to larger increases between 2019’s numbers and 2021 rather than comparing to 2020 pandemic numbers to more accurately gauge the future growth of the gaming division.

The company’s pictures division, which includes film, network and TV production, saw profits of 25.4 billion yen compared to 27.0 billion yen in Q1 2020. The increase in advertising ad subscription revenues was offset by decreased sales to home entertainment because of fewer theatrical releases in 2020, as well as lower licensing revenues from TV productions.

Totoki said that while music is booming and theatrical box office has improved in recent months, movie attendance has not completely recovered and new COVID surges are complicating projections for the rest of fiscal 2021 and beyond. He said Sony is still feeling the longterm effects of pandemic shutdowns in TV and movie production.

In fiscal 2020, Sony’s strong Playstation 5 sales helped to offset pandemic-induced declines in Sony Pictures profits. In late April, Sony reported that it had sold 3.3 million PlayStation 5 consoles in the final quarter of fiscal 2020, bringing its full-year tally up to 7.8 million units. That helped to offset what the company referred to as a “significant decrease in sales” at Sony Pictures.

“The significant decrease in sales was primarily due to decreases in sales for Motion Pictures and Television Productions,” the company wrote about its Pictures division performance in 2020. “The decrease in sales for Motion Pictures was due to the absence of any major theatrical releases in the current fiscal year resulting from the impact of theater closures due to COVID-19, partially offset by higher home entertainment sales of prior year and catalog titles. The decrease in sales for Television Productions was due to lower deliveries of new shows primarily due to production delays related to COVID-19.”